I've been enjoying Matthew Yglesias's snark on this topic for a while [0]: That's because Amazon, as best I can tell, is a charitable organization being run by

I've been enjoying Matthew Yglesias's snark on this topic for a while [0]: That's because Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers. The shareholders put up the equity, and instead of owning a claim on a steady stream of fat profits, they get a claim on a mighty engine of consumer surplus. Amazon sells things to people at prices that seem impossible because it actually is impossible to make money that way. Earlier [1]: If Amazon does have an evil Part B to its plan where it uses its monopoly status to jack up profit margins, that at least gives competitors a fighting chance. The real risk is that "sell the devices at cost and make it up on e-books, but wait, we don't make profits on those either" is all there is to the plan, and Amazon's investors have just unleashed a storm of locusts on the world that will ruin everyone else's profits. ... But for consumers, it's great. An Amazon Prime membership is the most outrageously good deal in commerce today. But competitors should be afraid. It's an amazing deal and you can't beat it precisely because Amazon can't make it work, either! [0] http://www.slate.com/blogs/moneybox/2013/01/29/amazon_q4_profits_fall_45_percent.html http://www.slate.com/blogs/moneybox/2013/01/29/amazon_q4_pro... [1] http://www.slate.com/blogs/moneybox/2012/11/05/amazon_destroyer_of_worlds.html http://www.slate.com/blogs/moneybox/2012/11/05/amazon_destro...